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Last Updated: Thursday, 29 April, 2004, 16:25 GMT 17:25 UK
No bids for Algeria phone permits
Woman using telephone
Telephone usage is not widespread in Algeria
Algerian regulators say there have been no bids for two fixed-line telephone permits which required $1bn-worth of investment.

Algeria's rigid call prices, which are set at artificially low levels, are thought to have deterred bidders.

The government has committed itself to privatising the country's economy.

But there was surprise this week when re-elected Algerian President Abdelaziz Bouteflika shied away from appointing a more reform-minded cabinet.

Investment needed

Mr Bouteflika - who won a second term with 85% of the vote on 8 April - re-appointed most his ministers, including the mining and finance chiefs.

The $1bn required from the successful bidder is needed to upgrade Algeria's creaking telecommunications infrastructure.

The telephone system regularly breaks down.

We should review our prices before going forward in calling foreigners to come here
Messaoud Chetih, Algerie Telecom
Its operator, state-owned Algerie Telecom, has also struggled to cope with growing demand for telephone lines.

"I think foreign investors were not ready to put over $1bn in this. We need to find a better way to attract them," an official from the telecoms regulator told the Reuters news agency.

There are 2.2 million telephone customers in the country, which has a population of 32 million inhabitants.

Officials had hoped the licence auction would allow it to boost its subscriber base to 2.6 million by the end of the year, and to three million by the end of 2005.

The telecoms regulator said five companies had been interested, including some from Europe, but that the sell-off had now been postponed indefinitely.

"We are not ready yet," said Algerie Telecom general manager Messaoud Chetih.

"We should review our prices before going forward in calling foreigners to come here."

He said a one-minute local call in Morocco costs the equivalent of eight Algerian dinars (10 US cents), compared to 11 dinars in Tunisia and just one dinar in Algeria.




SEE ALSO:
Observers praise Algerian voting
10 Apr 04  |  Africa



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